University of Northern Iowa says tuition plans rest with lawmakers

Aug 7, 2017 at 4:37 pm | Print View

CEDAR FALLS — The first of Iowa’s public universities to unveil long-term tuition plans, the University of Northern Iowa said Monday it wants to ratchet down increases through 2022 — provided the Legislature picks up more of the tab than it did this year.

UNI’s expectations are likely to prove different from those of Iowa State University and the University of Iowa, which are scheduled in the coming days to present their plans also. Based on earlier comments, both institutions want to more aggressively increase tuition to be in alignment with their peer universities to better attract and retain key faculty.

Increasingly, there are signs the Iowa Board of Regents may cede more control over the rates to the individual campuses.

At the task force meeting here Monday, UNI President Mark Nook said the university would like to minimize its tuition increases through 2022, proposing that the basic resident undergraduate rate hikes trend down from this year’s 5 percent bump to 4 percent in 2019 and eventually 1.75 percent by 2022.

But Nook said he supports the three universities — which together educate nearly 82,000 students — finally going their separate ways on the tuition front.

“If we follow suit and keep our price point the same, we will price ourselves out of the market, he said, “and we will cripple our enrollment.”

But to keep UNI tuition increases modest, Nook said lawmakers must come through with annual appropriations aligned with inflation, which has been about 1.75 percent.

If the state instead maintains status quo support, year-over-year resident undergrad tuition would increase nearly 7 percent in the 2019 school year, 5 percent in 2020, 4 percent in 2021 and 3 percent in 2020, according to a Nook’s tuition plan.

And if state support drops by 3.2 percent — the same amount it did from the 2017 budget year to the current fiscal term amid a tight state budget — UNI’s resident undergrads would pay nearly 12 percent more in 2019, 5 percent more in 2020, 4 percent more in 2021 and 3 percent more by 2020.

Interim Iowa State University President Ben Allen is scheduled to make his tuition presentation Wednesday, and University of Iowa President Bruce Harreld will present his Monday.

Nook told the task force his school crafted its proposal based on several assumptions.

First, UNI plans to hold its expenses to inflation-adjusted 2008 levels.

Second, UNI would see its enrollment increase from last fall’s 11,905 to 12,350 by the 2022 academic year — requiring at least 12 full-time faculty additions, along with higher health care costs and pay raises.

Nook said he wants to increase UNI’s out-of-state enrollment, as those non-resident students pay higher tuition.

“We have a commitment to the state to educate the people of Iowa, and we won’t back away from that,” he said. “But we need to grow the non-resident students faster.”

UNI also wants to improve its student financial aid, which is “currently quite low.”

With that in mind, UNI expects to need $83.2 million in tuition revenue in the 2018 budget year to maintain its inflation-adjusted 2008 expense goal — if the state comes through with a 1.75 percent appropriations increase. By 2022, if UNI is keeping its expenses under that 2008 mark, it would need $94.7 million in tuition revenue — again, as long as appropriations keep up.

But if that level of state funding does not happen, Nook said, “things get out of hand pretty quickly.”

In actual dollars, UNI would like to keep its resident undergrad rate to $8,237 a year by 2022. That’s roughly 10 percent above the $7,457 rate resident students will pay starting this fall.

But with flat appropriations, UNI’s 2022 increase would reach $8,948 — or nearly 20 percent above this fall.

And continued cuts on par with those from the past legislative session would raise UNI rates to $9,304 — which is almost 25 percent above this fall.

“I would argue the last one is not a reasonable tuition increase for our students to take on,” Nook said.

Nook stressed the budget models were not promises but illustrative of how tuition is tied to state appropriations.

“What they are is a guide for people to understand the sensitivity of our budget to state appropriations and to tuition dollars in light of what it takes for us to deliver quality,” he said.

In coming up with his proposal, Nook said he sat down with ISU and UI leaders to gauge their needs. Although all three universities for years have maintained similar resident undergrad rates, that tradition could change as Nook acknowledged the UI and ISU have different missions and expenses.

“I think each of the institutions needs to have the ability to look at those costs, look at those needs, and have the resources — the revenue streams — that they need,” he said. “And I think it does mean that our tuition ought to be separate.”

He noted UNI’s combined $8,309 in tuition and fees for last school year ranked it near the middle of its regional peer universities. But the UI’s tuition and fees, at $8,676, and ISU’s, at $8,219, sat at the bottom of their peer groups of top research institutions.

“If Iowa and Iowa State were to move to their peer medians — $12,000 — we would become one of the most expensive schools in our class and be priced completely out of the market for the students that are choosing a comprehensive university,” Nook said. “So I think Iowa and Iowa State need to have a conversation about what their tuition is, and if it needs to go up significantly, it should go up so that they have the revenues to deliver on their mission.”

He acknowledged past concerns that keeping UNI costs relatively low while ramping up rates at the UI and ISU could create a perception that UNI is somehow less valuable, or the bargain regent option.

“The overriding conversation that I’ve heard is that these three numbers ought to be the same because you get what you pay for,” Nook said. “And it’s simply not true. When the price is subsidized by the state, quality isn’t tied to tuition level. It’s tied to total revenue.”

He noted 88 percent of UNI students come from Iowa, meaning they pay the lower in-state tuition. Thus UNI relies on state appropriations for 52 percent of its revenue — while state dollars make up a smaller portion of the UI and ISU budgets.

State Sen. Jeff Danielson, D-Waterloo, spoke during the public portion of Monday’s meeting in support of differential tuition rates and differential state support. He urged recognition that UNI has a unique budget model and thus requires more state funding.

He criticized past thinking that state funding for all three public universities align.

“I’m not sure why that was ever logical,” he said.

Regent Larry McKibben, chair of the tuition task force, hinted Monday at support for such differentiation.

“Each of our three universities is unique and should be treated as such, and that is exactly, friends and neighbors, why we’re here today.”

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